The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence using Subjective Well-Being Data

36 Pages Posted: 8 Oct 2014 Last revised: 7 Mar 2015

See all articles by Jan‐Emmanuel De Neve

Jan‐Emmanuel De Neve

University of Oxford

George Ward

Centre for Economic Performance, LSE

Femke De Keulenaer

IPSOS

Bert Van Landeghem

KU Leuven - Centre for Institutions and Economic Performance (LICOS); University of Sheffield - Department of Economics

Georgios Kavetsos

London School of Economics & Political Science (LSE)

Michael I. Norton

Harvard Business School - Marketing Unit

Multiple version iconThere are 2 versions of this paper

Date Written: March 6, 2015

Abstract

Are individuals more sensitive to losses than gains in terms of economic growth? Using subjective well-being data, we observe an asymmetry in the way positive and negative economic growth are experienced. We find that measures of life satisfaction and affect are more than twice as sensitive to negative economic growth as compared to positive growth. We use Gallup World Poll data from over 150 countries, BRFSS data on 2.5 million US respondents, and Eurobarometer data that cover multiple business cycles over four decades. This research provides a new perspective on the welfare cost of business cycles and has implications for growth policy and our understanding of the long-run relationship between GDP and subjective well-being.

Keywords: economic growth, business cycles, subjective well-being

JEL Classification: D03, O11, D69, I39

Suggested Citation

De Neve, Jan-Emmanuel and Ward, George and De Keulenaer, Femke and Van Landeghem, Bert and Kavetsos, Georgios and Norton, Michael I., The Asymmetric Experience of Positive and Negative Economic Growth: Global Evidence using Subjective Well-Being Data (March 6, 2015). Available at SSRN: https://ssrn.com/abstract=2506600 or http://dx.doi.org/10.2139/ssrn.2506600

Jan-Emmanuel De Neve (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

George Ward

Centre for Economic Performance, LSE ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Femke De Keulenaer

IPSOS ( email )

United States

Bert Van Landeghem

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

University of Sheffield - Department of Economics ( email )

9 Mappin Street
Sheffield, S1 4DT
UNITED KINGDOM

Georgios Kavetsos

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Michael I. Norton

Harvard Business School - Marketing Unit ( email )

Soldiers Field
Boston, MA 02163
United States

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